Personal finance and budgeting play a role in everyone’s life. It’s no secret that your ability to wisely allocate financial resources has a significant impact on your quality of life.
Unfortunately, most individuals — including your employees — are probably not as financially capable as they ought to be. High schools and colleges have stopped making financial literacy a requirement to graduate, and so many individuals are completely unaware of personal finance basics of personal finances.
At this point, you might be wondering why you, as an employer or someone in HR, should care about this. Why should it matter to you that employees can successfully manage their finances? Well, here are just some of the reasons why you should invest (or advocate that your business invest) in personal finance training for employees:
Less Stress, Higher Productivity
For one, stress as a result of personal financial mismanagement is a common problem of the workforce today, resulting in lower rates of productivity and ultimately affecting a company’s bottom line. About 68% of employees are not fully engaged at work, and much of this can be attributed to financial stress.
This is backed up by Dr. Thomas Garman, a Virginia Tech professor, who states, “Workers waste 20 hours of company time a month thinking about and dealing with personal finances.” Further, 40% of employees have even openly admitted that personal stress greatly affects their productivity at work.
With these figures in mind, teaching your employees about personal finance management can only be a win-win. Most employee learning takes place during work hours, so it makes sense to offer opportunities for employees to learn more about personal finances. In return, they will get rid of financial stress and become more productive.
Retain Top Talent
Providing a benefit like personal finance training for employees can also help you attract and retain top talent. In fact, a Society for Human Resources study found that “employees are looking to their employers for help with managing their financial wellness.” Today, with the rise of the gig economy, many workers are able to control their work hours and get paid for extra time on the clock. Given the fact that the gig economy as a whole can offer more pay, this provides the means for employees to feel financially secure while also attracting top talent.
Jobs as part of the gig economy rarely come with benefits, so including personal finance training in your benefits package gives yourself an edge when it comes to recruiting talent. Thus, including financial wellness training as a part of an employee’s benefits package can yield positive results. This is a great way for a company to demonstrate their commitment to the well-being of those they employ.
Ripple Effect on Society
An often-overlooked advantage of providing finance training for your employees is the ripple effect it can have. Giving employees this information enables them to spread financial best practices to friends and family, ultimately improving the well-being of those around them. While this may not immediately and directly benefit your company, it does create for a more financially stable community in the long-run. In turn, this new, more skilled society will help your business’ bottom line.
These are just a few of the reasons you should consider financial training benefits for your employees. As you can see, alongside enhancing employees’ lives, your company stands to benefit greatly from this inclusion. The best part is that personal finance training programs are actually quite easy to implement. Here are some tactics to consider:
Give a Financial Self-Assessment
The first step in promoting the financial wellness of your employees is gauging how much they know about personal money management. People often struggle with planning their finances because they neglect (or intentionally avoid) thinking about them critically. As a result, they are unable to adequately plan for the future.
A financial self-assessment solves this problem and allows for both managers and employees to learn about their personal financial capabilities. Once this is done, your employees can identify pain points in their financial planning and take the appropriate steps to make changes. There are many free financial assessment quizzes available online that you can hand out to your employees. A good starting point for a personal finance self-assessment can be found at the Consumer Financial Protection Bureau website.
Offer Classes/Training Seminars
Fixed classes or seminars are effective ways of teaching financial wellness on an ongoing basis. You could devote one hour a week to a training seminar where employees could be given the chance to hear from various experts and financial planning. Each seminar could cover a different topic under the umbrella of personal financial wellness, including how to improve and maintain good credit, how to pay off credit card debt, how to plan for retirement and a child’s education, how to invest, and more.
Even if you aren’t in the position to host seminars, you could consider giving your employees the option to enroll in online money management classes and cover the cost. Alternatively, you could offer premium access to sites like SkillShare or Udemy that offer classes from experts across a range of topics.
Provide Budgeting Tools
Budgeting is key to personal finance management. Make sure your employees know basic budgeting skills — you could even start with the “give, save, and spend” concept that is used to teach children about money. From there, teach employees about the principles of setting up a household budget such as identifying income, tracking spending, and determining goals. You could also keep an eye out for financial tools that could help your employees. These include free retirement planning tools, investing tools, budgeting apps, and more.
Spread Awareness About Cost-Effective Options
Another initiative that is easy to implement is spreading awareness about resources that outline how to get the most cost-effective services. Choosing cost-effective options can increase savings and aid money management efforts. One way to do so is to teach employees how to evaluate various deals for everyday services through a monthly email newsletter.
For instance, you could send out a newsletter that details how to pick the best internet deal for one’s home, covering pointers like looking for plans in the “Back to School” period in August. The following month you could send out a newsletter about how to pick the best car insurance, and what to consider when choosing one. Spreading awareness about ongoing deals that you have researched, as well as knowledge about how to choose cost-effective options is a good way to educate employees about making financially sound decisions.
Promoting the financial wellness of your employees is a great investment, benefitting both your company and your employees. Use these tips to introduce personal finance training into your employee benefits package to build a more productive and financially savvy workplace.